By GRI’s CEO Robin Hodess and UNEP FI’s Head Eric Usher

It is a truism that business both depends on and impacts biodiversity. This was one of the main messages from the Business & Biodiversity Assessment’s Summary for Policymakers released by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) earlier this year. As European Central Bank Supervisory Board Vice-Chair Frank Elderson clearly stated, “nature is the life support system of our economies.”

Yet, this foundation is rapidly eroding: seven of the nine planetary boundaries have now been breached. With biodiversity loss accelerating and ecological tipping points drawing closer, governments, regulators, companies and financial institutions have widely recognised that the degradation of nature carries profound environmental, social and economic risks.

For the finance sector, these pressures are now increasingly viewed as a systemic financial risk. Factors such as water stress, soil degradation and reduced flood regulation disrupt supply chains, reduce asset values, and increase credit and insurance risks. Against this backdrop, the nature‑related reporting landscape is evolving, to help financial institutions better understand, disclose and respond to these risks.

A rapidly evolving reporting landscape

By understanding and disclosing their most significant impacts on biodiversity, financial institutions can take action to prevent or mitigate harm while responding to growing expectations from regulators, investors and clients. Across jurisdictions, supervisors are beginning to integrate nature considerations into their mandates.

In the European Union (EU), the European Central Bank has strengthened its nature-related mandate by integrating ecosystem degradation into its monetary policy statement and leading research on water-related financial risks. South Africa’s Prudential Authority has conducted pilot assessments of bank exposures to nature-related risks. In China, the green finance framework has evolved to encompass transition and biodiversity finance, as evidenced in UNEP FI’s recent analysis, Greening the Chinese Banking System.

Despite this momentum, a persistent obstacle remains: access to reliable and comparable biodiversity data. IPBES recently found that fewer than one percent of publicly reporting companies disclose their biodiversity impacts. A global IPBES survey of financial institutions, representing around 30 percent of global market capitalisation, similarly identified data availability — alongside a lack of metrics, models and scenarios — one of the main barriers to undertaking nature‑related risk assessments. As expectations rise, financial institutions are increasingly reliant on clear, consistent corporate disclosures to understand how pressures linked to biodiversity loss translate into financial risk and opportunity across portfolios.

Even with the data challenges, the nature reporting landscape is maturing rapidly. New standards, methodologies, frameworks and tools are emerging, and alignment across approaches is increasing. UNEP FI’s Accountability for Nature report highlights the increasing use of location‑specific metrics, growing attention to value‑chain impacts, and the development of more detailed guidance on stakeholder engagement. Recent standard‑setting developments reinforce this trajectory. The Taskforce on Nature-related Financial Disclosures (TNFD) provides structured guidance to help organizations identify and assess nature‑related risks and opportunities. The updated Biodiversity Standard from the Global Reporting Initiative (GRI 101), effective since January 2026, provides globally applicable requirements for organizations to disclose their impacts on biodiversity and ecosystems, with early practice examples of how companies are beginning to put this into practice. Taken together, these tools enable financial institutions to link corporate impacts to portfolio‑level risk analysis.

The reporting landscape will continue to evolve in 2026. The International Sustainability Standards Board (ISSB) has moved BEES (biodiversity, ecosystems and ecosystem services), its nature-related disclosures project, from research to standard-setting and plans to release an exposure draft ahead of COP17 in Yerevan this October, focusing on financial materiality. Meanwhile, sustainability disclosure regulations in jurisdictions such as China, Malaysia and the EU are placing increasing emphasis on double materiality, reinforcing the need for disclosures that equally address both impacts on nature and the financial consequences of nature loss.

What this means for banks and insurers

To remain competitive and aligned with regulatory change, banks and insurers increasingly need to understand how nature loss affects their portfolios, evaluate client impacts and dependencies, and integrate nature considerations into lending, underwriting, investment and risk management decisions.  This is where impact reporting matters. Reliable data on impacts can help financial institutions identify where client activities may be contributing to ecosystem degradation, which in turn can affect production, cash flows, asset resilience, insurability and long-term portfolio performance.

Joint GRI–TNFD case studies have already demonstrated how corporate impact assessments, alongside dependency assessments, provide essential input for portfolio level analysis and help channel capital towards nature-based solutions. The GRI Financial Services Sector Standards, due to be released later this year, will further support banks, insurers and capital markets by clarifying expectations for disclosing impacts associated with financing and insurance activities.

Within financial institutions themselves, the shift from awareness to implementation is well underway. UNEP FI members are actively piloting nature‑related risk assessments, adopting emerging methodologies, and engaging in working groups that support integration of nature into strategy, risk management and disclosure. Recent case studies from Banco Davivienda, Banco de Bogotá and Nedbank illustrate this progress, highlighting how signatories of UNEP FI’s Principles for Responsible Banking are using ENCORE, a free online tool, to identify nature‑related dependencies and risks across their portfolios.

From frameworks to action

A clear shift is occurring: nature is moving from a voluntary sustainability topic to a core element of financial regulation, risk management and corporate accountability. Looking ahead, effective implementation will rely on financial institutions combining complementary approaches and translating them into practical, decision‑useful action. Continued collaboration among standard-setters, regulators and international organizations will be essential to maintain consistency and ensure disclosures are coherent, comparable and meaningful— with the ultimate goal of aligning financial flows with nature‑positive outcomes.

 

Through the Impact Centre, UNEP FI helps financial institutions embed the practice of impact management into their business strategy and operations, ensuring that they can meet environmental and social challenges while at the same time also achieving business success.